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Office Market Pulse Chelmsford Q3 2014

The office market across Chelmsford and many of the towns surrounding has seen a marked improvement in activity and confidence so far this year, resulting in no grade A space being available and a gradual take-up of refurbished buildings through occupiers seeking good quality offices.

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In this issue:

Quality is winning

Occupiers are prioritising modern, open plan accommodation. Across much of Essex however, there is a lack of high specification offices available to meet demand.

With this in mind, it is likely that developers will soon be taking the initiative again. The last speculative office development in Chelmsford was seven years ago, with the completion of Priory Place providing 42,000 sq ft of grade A space.

In Basildon, low quality space has proved difficult to let and is being offered at prices as low as £10 per sq ft.

Rents are high in the city

Chelmsford was recently awarded city status in 2012, and has been seeing rents of £23.50 per sq ft at Priory Place, whilst a rent of £25.00 per sq ft is being quoted for the new 24,000 sq ft building in the city centre on part of the former Anglia Ruskin University site, due to be completed in early 2015.

Away from the city, Brentwood with its close proximity to the M25 has seen headline rents hit £20.00 per sq ft.

Demand increasing in towns

Billericay, away from the commercial centres, but in the middle of the triangle between Chelmsford, Basildon and Brentwood, offers competitive rent levels of £16.50 per sq ft. This competitive rent has contributed towards a surge in demand in 2014, with 18,000 sq ft being let across five buildings on Lake Meadows Business Park.

Harlow has also seen an improving market with an increase in lettings reducing the large over supply of vacant space. The town has also seen its first sale of an office building for conversion to residential accommodation. Redstone House in the town centre, providing 13,000 sq ft over three floors, is to be converted into 18 one bedroom apartments.

Regional transaction volumes outstrip those in London

Our latest UK Investment Transactions (UKIT) report has found that in Q3 2014, quarterly investment volumes reached £16.3bn, the highest since Q4 2013 and above the five year average of £9.4bn. For the first time since Q1 2011, the volume of single asset regional transactions is also greater than those for property located in London. When you consider the number of regional portfolio deals transacted in Q3, the ratio of regional to London investment is almost 2:1.